Senate advances legislation to increase minimum wage

2/6/2015

In his State of the State Address, Illinois Governor Bruce Rauner voiced his support for raising Illinois’ minimum wage and his intention to work with the General Assembly on a proposal. However, just a day later Senate Democrats rushed through a bill to increase the minimum wage, not providing time to work across the aisle and with the Governor on the issue.

In November Illinoisans voted in favor of a ballot question that asked, "Shall the minimum wage in Illinois for adults over the age of 18 be raised to $10 per hour by January 1, 2015?" Critics of the legislation approved by the Senate argue that it goes beyond the scope of the ballot question, ultimately increasing the minimum wage to $11 by 2019.

Senate Bill 11 would increase the minimum wage to $9 on July 1 of this year and then increase it incrementally by $.50 a year ultimately resulting in an $11 minimum wage by July 1 of 2019. It also takes away the ability of municipalities to institute their own minimum wage going forward. An exemption to this rule is carved out for the City of Chicago however, which could move forward with the $13 minimum wage ordinance adopted in December.

The bill does make an attempt to provide relief to employers of 50 or less by creating a credit against their withholding tax that would be equal to the increased wages they pay as a result of increasing the minimum wage. However, concerns have been raised that this provision essentially results in the taxpayers supplementing the increase and could encourage business owners to keep employees at minimum wage so that they could continue to receive the tax credit.

Senate Bill 11 now heads to the Illinois house where it faces an uncertain future.